Secrets of success in aftermath of crisis

Richmond-based thecitysecret was forced to shed staff at the height of the financial crisis, as customers scaled back on spending.

Now the company, which writes software for London-based hedge funds and investment banks, plans to boost staff numbers to 40 by the end of the year.

Managing director Martin Worner founded the firm in 2000 after becoming disillusioned with life in London.

A former UBS and Morgan Stanley employee, he worked in investment banking for eight years before deciding to return to his native North Yorkshire.

"I'm pretty optimistic that we will have made up a lot of the ground this year," said Mr Worner.

"Over the last six to eight weeks, there is a lot more optimism that things need doing."

thecitysecret works with two top-tier investment banks and two large hedge funds, plus an information provider. It writes software for trading complicated investments such as swaps and options.

Mr Worner said the company avoided the credit markets and mortgage-backed securities, which have been blamed in part for the financial crisis, helping it to stay afloat.

However, after a period where complex investments fell out of favour, he said financial institutions are delving back into more exotic products.

Mr Worner added that the collapse of investment banks Lehman Brothers

and Bear Stearns left a gap in the market which rivals are now capitalising on. "It went simple for a while but now they are starting to look equity swaps and structured products," he said.

"Regulations mean more transparency needs to be there. On the back of that there's going to be investment.

"They are rebuilding on what they haven't done for the last two years."

thecitysecret designs bespoke programmes for financial institutions, meaning customers then own the intellectual property.

"It makes it very attractive not having to pay us licences forever," he added.

Mr Worner said staff are attracted by rural life, and many City clients enjoy visiting the company's Richmond offices. It now employs 25 staff and recently recruited two software engineers.

"We've had a trickle of people heading up from London in the same way that I did," he said.

"People like to get away from the hustle and bustle of living in the city."

However, Mr Worner said while things are picking up, it will take a while for business to return to the boom years of before the recession.

"The financial crisis shook out the companies that were good and those that were not. People are looking very hard at reputation.

"But the markets are still nervous and people are still nervous. It takes a year or so to rebuild confidence."